Recession Tour: Obama Shops, Empty Shops, & A Cup Of Hope

The economy is tanking, companies are laying off workers by the thousands, and in downtown Washington's East End, there were enough empty storefronts for four Obama Inauguration souvenir shops to open for short stays this month. So it's understandable that some merchants along Seventh Street NW wince as they talk about Aaron Gordon, who just opened a shop at Seventh and E.

Gordon is selling frozen yogurt. In January. In a storefront where the previous tenant lasted only eight months.

"Yeah, everyone thinks this is a cursed location," Gordon says. But he's confident enough to laugh as he says it, because despite the recession, Seventh Street NW is remarkably busy.

A steady stream of customers flow into Gordon's TangySweet shop and into the adjacent Red Velvet cupcake store that Gordon and his sister run. At Sei, a new sushi place a few doors down, tables were full even before the restaurant officially opened last week. All along the street, according to developer Douglas Jemal, who controls many storefronts stretching up past the sports arena, there's sufficient traffic to keep businesses afloat. "We don't have one delinquent account on Seventh Street," Jemal says.

The ravages of the recession are in plain view in spots around the region -- malls where empty storefronts pop up like big boxes did in the boom-time '90s. At first glance, Seventh Street may look similarly pocked with failure. The Bead Museum, just down the block, closed last month. Olsson's bookstore died last fall. Jemal's effort to lure a grocery store didn't work out.

But restaurants are moving into at least a couple of the empty storefronts.

"Seventh Street is at a crossroads," says Catherine Timko, whose D.C. company, Community Retail Catalyst, works with neighborhoods to attract retailers. "It's had some closings and the rents have been soaring, but foot traffic is strong."

Washington is not the recession-proof city it seemed to be when government was more dominant in the local economy, but at least here, consumer spending is chugging along, in part because the city has suffered relatively light job losses so far. And part of the reason for that is a boost from a new administration.

Gordon, 35, a native Washingtonian whose first TangySweet shop opened near Dupont Circle last summer, chose this location because of the apartment and office building boom of the past 15 years, a change that has given Seventh Street a far busier feel than it has had since before the 1968 riots that knocked out major retailers.

"This area is cutting edge, vibrant, the feel that Georgetown had when I was growing up," he says.

With a Smithsonian museum, several theaters and the Wizards and Capitals all within a couple of blocks, Gordon believes he can sell enough yogurt to pay Jemal's $100-a-square-foot rent -- a figure some merchants consider outrageously high. (Jemal says downtown rentals are lower than the market can bear. Time will tell.)

"It's scary," Gordon concedes. "The open spaces along the street are a concern. But the neighborhood is still up and coming." He will probably have to keep the shop open deep into the night to make his nut, but Gordon and others believe the street is morphing into one of the District's main restaurant rows.

Seventh Street, once home to major department stores, served from the '60s to the early '90s as a depressing illustration of the District's decline. Then came the arts and sports.

Margery Goldberg's Zenith Gallery was one of a handful of arts start-ups that took advantage of low rents, good space and proximity to the Mall to create what they optimistically believed would be a Gallery Row.

Two blocks up, the visionary Abe Pollin, intent on moving his basketball and hockey franchises into the city, built an arena with his own money, sparking a wave of development.

Now Goldberg is closing her gallery after 22 years on Seventh. She'll keep selling artwork from her home. "I remember all the economic downturns -- double-digit mortgages, the Gingrich shutdown, the first Gulf War," she says. "People are more freaked out this time. It's empty storefront after empty storefront here."

Goldberg blames landlords for charging exorbitant rents and the city for providing insufficient police protection.

But what Goldberg sees as an ugly emptying looks like the churn of progress to others.

"Life is about change," Jemal says. The recession "has hit like a tsunami." In downturns in the 1980s and '90s, "there were still viable banks lending money for projects. Today, everything is shut down. But the businesses are making it, and we're ready to expand when the money starts flowing again."

Some Seventh Street eateries surprised themselves by doing better in December than they had a year earlier, says Jo-Ann Neuhaus, director of the Penn Quarter Neighborhood Association. "We didn't set out to be a restaurant and entertainment center, but that's what's happened, and for now, people are still coming."

Comments

I was interested in your comments on DC's colonial-like status today on NPR. I used to live in DC (I now live in the Western US). The solution to DC's status problem seems obvious to me: retrocede the residential areas of DC back to Maryland. The US needs a capital district in order to house federal buildings; there is no need for the district to contain residential areas. DC's Virginia land was retroceded and that worked out very well.

The Mall and the surrounding, contiguous territory that contains federal buildings, parks, monuments and other such land should make up all of DC. The rest of the district (including all the residential areas) can be the city of Washington, Maryland, and vote for House and Senate representation together with the rest of Maryland. The new, smaller DC should be zoned 100% non-residential.

With the perspective of having lived in DC and far from it, partial retrocession like a solution with no downsides whatsoever. Is this being promoted at all? If not, why not?

Thanks very much and best regards.

Posted by: comments99 | January 25, 2009 11:20 AM

"DC's Virginia land was retroceded and that worked out very well."

comments99, Are you sure you've lived? Have you ever been to the areas of DC retroceded to Virginia? There's no comparison between the two. From a planning perspective, this corner of Northern Viriginia has made much progress in the last 30 years catching up to those parts of the District that remained in the District. But it's still suffering from the "build whatever wherever" mentality that was allowed to happen without review from the federal interest. If we want Washington to remain a world class capital, all its neighborhoods must remain part of the capital. It's bad enough to look southward over the Potomac at valueless buildings squeezed in wherever space permits ... We don't need to be looking northward from the Mall at a similar scene!

Posted by: JohnSmith7 | January 25, 2009 12:43 PM

You're assuming that Maryland wants to take those areas back.

You'd be dumping about 500,000 residents onto the state of Maryland, with very high poverty rates, poor public schools, and high crime. There aren't enough residents of the Palisades to cancel out NE and SE D.C.

Maryland already fights to maintain some semblence of control of Baltimore. Adding another "Baltimore" to Maryland could severely cripple the state as it is currently configured.

You'd have to settle things like representation on the state level (as each current state politician would see their level of influence decline) as well as on the national level - would you redistrict congressional representatives? It would require re-distributing them from somewhere - a red state? a blue state? Surely those folks would have something to say as well.

There's no easy solution, because any change in DC's status would require others to give up some measure of power. That's not likely in the modern political environment. It encompasses all the problems of modern American society: poverty, education, crime, racism, conservative/liberal, spending, and power. Don't look for any solutions any time soon.

Posted by: DrFire | January 25, 2009 12:50 PM

JohnSmith7: your concerns have nothing to do with whether those areas are part of a federal district. we have excellent land use planning in Portland, Ore., for example, and it isn't part of a federal district. land use planning is a completely separate issue. if we pile every unrelated issue atop the colonial problem it will never get solved. let's deal with separate issues separately.

DrFire: it is important to get Maryland on board but Congress has the power to retrocede on its own. Maryland would be far from the only state with more than one large city that has problems. such concerns are separate from fixing the colonial problem and retrocession seems like the only pure solution to the colonial problem.

thanks for your comments.

Posted by: comments99 | January 25, 2009 1:39 PM

I know that other states have 2 large cities, but the Maryland Congressional delegation would have to get on board. Automatically you'd have 2 senators and all the MD reps against it. They'd convince a bunch of their similar leaning colleagues to vote against it.

And that's without talking about Congressional representation.

You'd have to sell this to Maryland and to the nation at large. Try bringing up the costs too...care to estimate the amount of money it would cost to retrocede?

I used to work for DC Vote, one of the groups that works for DC voting rights. Retrocession was always on our radar, but was one of the most expensive - and least palatable - options.

Posted by: DrFire | January 25, 2009 2:16 PM

it seems to me like the only logical option. perhaps a serious discussion about it will bring support over time. Some Marylanders may like the idea right from the start. It was their land previously and the state would gain a prestigious city that has many attributes along with its problems.

the other options are all illogical and will never happen--a senator or two for one medium sized city? we'll never see that; it doesn't make any sense. other options have gotten no traction due to their inherent problems. the alternative is for the colonial status to become permanent, which seems very undesirable to me.

thanks.

Posted by: comments99 | January 25, 2009 2:41 PM

This is why if this storm really hits, I literally think we will have little notice...it will be like a financial Katrina, where everyone is on their own.

Isn't it remarkable that we have literally gone from our elected leaders telling us less than 6 months ago that "We have a fundamentally strong economy" to THIS??!?!--(Facing complete and utter destruction unless we allow the banksters to hold our entire nation financial HOSTAGE to the tune of TRILLIONS?!!!!

And they wonder why there is NO CONFIDENCE!!! They were either complicit and lying on a grand scale, or criminally incompetent, and likely BOTH!

Either way, no one trusts the government to get this right, when they never saw it coming. When every economist in this country was screaming about a pending housing and credit collapse with their hair on fire for the last 3 years, and no one in our leadership chose to listen, because their pockets were being lined.